The cuts could also lead to the loss of about 1.2 million public sector jobs.

TUC general secretary Frances O'Grady said: "The IFS is right. If the government does not change course, then there could be well over a million job losses in the public sector and savage cuts to vital services.

"This is the direct consequence of austerity policies that have shrunk the economy and cut living standards for millions."

In its Green Budget 2013, the IFS predicted that the government would have to borrow more than forecast in 2013 and that Chancellor George Osborne was "on course to miss his own target of debt falling in 2015".

Benefit cuts

Despite cuts to benefits levels, social security spending was likely to rise from 28.5% to 32.5% of all public spending by 2017-18, the IFS said.

Although families with children will experience the biggest benefit cuts in this parliament, spending on tax credits overall more than quadrupled to over £30bn a year between 1997-98 and 2010-11.

Government savings from benefit cuts are being offset by the planned increase in the personal tax allowance in 2013-14 - a "remarkable" £9bn tax cut that in effect neutralises the so-called austerity programme, argues the IFS.

The richest households will have been hit the hardest by 2015-16, the IFS concludes, thanks to:

increases in National Insurance contributions

a fall in the higher-rate tax threshold

withdrawal of child benefit from higher-income households

restrictions on pension tax relief

withdrawal of personal allowance for those earning more than £100,000

the 50% income tax rate on income over £150,000 (45% from 2013-14).

A Treasury spokesman told the BBC: "As the Institute for Fiscal Studies shows, the government continues to tackle the deficit in a way that ensures those with the broadest shoulders bear the heaviest burden.

"The IFS points out tax and benefit changes since the beginning of the Parliament will 'hit the richest households hardest', and changes this April will benefit working households."

If a new government opts for tax increases, as is likely given the borrowing forecasts, the IFS says a penny on the main rates of income tax could raise £5bn "mostly from the better-off".

Paul Johnson, IFS director, said the chancellor was "allowing borrowing to increases substantially in this Parliament... whilst promising another dramatic dose of public spending cuts in the next Parliament".

As a result, currently "protected" departments, such as health, education, and overseas aid, could also find themselves facing budget cuts after the next general election.